Obama’s Impotence

At the last moment, the United States government avoided a fatal coronary. President Obama hoped to be seen as an intermediary between Democrats and Republicans, but he didn’t cut a very impressive figure.

Barack Obama doesn’t look happy. It’s shortly before midnight and he appears tired and exhausted. One of the most potentially serious crises of his presidency has just been overcome. “Tomorrow, I’m pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business,” he announced. That sounds more like a shopkeeper talking to his customers, not like a president addressing his countrymen. Did Obama show leadership ability in his battle with Republicans? But the Republicans also face deep problems as well.

And the real battle over America’s ailing finances is yet to come.

It was a showdown that Hollywood would have loved. The clock had been ticking for days, and the nation’s money would run out as of midnight Friday. Around 11:00 PM, Republicans and Democrats went before the cameras in a hail of strobe flashes. The deal had been made: $39 billion in cuts for the current budget year, the biggest budget reduction in U.S. history. Obama admitted that further difficult cuts would also have to take place. It was a risky poker game in which Republicans, Democrats and the White House had all taken a hand. The 2012 presidential elections were already casting their shadow over the proceedings — none of the players was willing to fold in the first important hand of that game.

Everyone wanted to save face in a game risky for all sides, including the Republicans, who had gained a majority in the House of Representatives in last November’s elections. John Boehner, Republican strongman in the House of Representatives and a pragmatist, submitted meekly to tea party pressure to adhere to their sole credo of more spending and program cuts.

But Boehner recognized, possibly at the last minute, that such a radical strategy would be beneficial to opposition Democrats at election time. If one wants to play the game, one has to make compromises. Surveys had shown that a majority of Americans rejected an economic blockade of the U.S. government and Boehner rekindled the fear of what happened 15 years ago when Republicans succeeded with their government shutdown: a total disaster. Former President Bill Clinton was able to put the blame on the Republicans and was promptly re-elected. But Obama didn’t escape unscathed this time. His critics accuse him of ignoring the conflict for too long and of waiting too long before finally getting his “fingers dirty.”

How Obama hoped to profit from his image as a go-between

Obama really tried to position himself as a sort of mediator between the bickering congressional personnel — as a genuine statesman hovering above petty partisan politics. Instead of that, he seemed at times to be standing on the sidelines like a helpless spectator. In addition, he publicly scolded Congress to act “like adults” — something many saw as arrogance.

But compared to the problems that lie ahead in the subject of the economy, the squabble over a shutdown seems to be just a harmless prelude. There is no question that a $14 trillion debt — a figure with twelve zeroes — is simply no longer viable. The United States has been living far beyond its means for decades, and the current budget deficit is now 10 percent of annual GDP. In comparison, the (often ignored) Maastricht ceiling for the European Union stands at just 3 percent of GDP. The next major battle will take place just a few weeks from now when predictions are that the current debt ceiling in the United States will be reached.

Treasury Secretary Timothy Geithner warns of fatal consequences should Congress fail to raise the debt limit but Republicans still vow to stick by their “no.” Negotiations on the 2012 budget that goes into effect on Oct. 1 of this year will be next on the agenda, and that’s when Republicans will get really serious. They want to reduce outlays over the next ten years by $6 trillion. That’s a Herculean undertaking. The current argument has only been “the first bite of the apple,” warns Republican Paul Ryan.

Above all, unless the signs are being misread, the subject of deficits and expenditures may well become the central theme of the 2012 presidential campaign.